The overall risk of the U.S. economy to experience a recession remains relatively low as jobs growth picks up, and GDP and inflation continue to grow at sustainable rates.  However, historically narrow treasury spreads and the Chicago Fed National Activity Index (CFNAI) three-month average below zero warrants some vigilance.

Comments on this week’s report:

  • Treasury spreads were little changed and remain historically very narrow as the 10-year minus 2-year spread and the 10-year minus 3-month spread sit at 0.22% and 0.09%, respectively.
  • Job growth continues to grow at a strong rate as the U.S. added 263,000 jobs in April and increased its year-over-year change from 1.72% to 1.76%.
  • As a result of the increase in jobs and virtually unchanged labor force participation rate, the unemployment rate dropped from 3.80% to 3.60%.
  • Wage growth, as measured by the change in average hourly earnings, continues to grow at a sustainable rate as its year-over-year growth increases from 3.33% to 3.37%.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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